AUSTRIA Law and Practice Contributed by: Raphael Holzinger, Julia Hochreiter, Matthias Jancura and Claudia Synek, Grant Thornton Austria
a transfer price determined using the cost- plus method or the cost-based cost-based TNMM. A comprehensible justification is required for the definition of the profit mark- up. • VwGH 17 March 2021, Ra 2020/15/0113; 27 November 2020, Ra 2019/15/0162; 19 April2018, Ra 2017/15/0041; 26 January 2012, Ra 2009/15/0032; 28 January 2003, Ra 99/14/0100 – a particularly precise service description is required in situations where the purpose of the contract is to provide com - plex services (eg, efforts, advice, know-how transfer). The documentation must enable an expert third party to verify within a reasonable period of time whether and to what extent the delimitation of income between the taxpayer and the affiliated company complies with the principle of arm’s length behaviour. For this purpose, the services rendered and remuner - ated must be presented in detail and record - ed in concrete terms. • VwGH 26 November 2015, Ra 2012/15/0023 – a low-risk distributor is generally charac - terised by the purchase and sale of goods. Generally, a low-risk distributor also has its own customer base as it is operating in its own name and on its own account. • VwGH 8 July 2009, Ra 2007/15/0036 – as regards group allocations, the essential state - ment from a transfer pricing perspective is that the mere submission of documentary evidence is not sufficient to prove the provi - sion of services (ie, the so-called benefits test) if the specific content of the services and the specific value of the services cannot be clearly determined from such documents. • VwGH 26 February 2004, Ra 99/15/0127 – there is no procedural provision that would require the tax assessment to be made only after a (requested) mutual agreement proce - dure has been concluded.
• VwGH 18 December 2019, Ra 2018/15/0025 – if the legal requirements of Section 48 of the FFC (ie, Austrian provision regarding potential unilateral relief from double taxation) are met, it is at the discretion of the ATA to order the de-taxation provided for therein. • UFS 30 July 2012, RV/2515-W/09 – regard - ing benchmark studies and the transactional net margin method, in cases where the price determined by the taxpayer is outside the range of arm’s length values, the ATA must make an adjustment to a point within the range. It may be appropriate in such cases to choose the median, especially if no other value within the range is more reliable. • BFG 11 July 2014, RV/7101486/2012 – this concerns the arm’s length nature of the charged management fees. • BFG 22 November 2018, RV/2100386/2017; UFS 6 April 2007, RV/4687-W/02 – regarding the profit mark-up of intercompany services, accordingly, services with a routine character cannot always easily be charged with a profit mark-up of 5%. Hence, a mark-up of 10% might be considered as more appropriate in some cases (such as in the case of this deci - sion). • UFS Feldkirch 20 May 2011, FSRV/0015-F/10 – this concerns negligent reduction of cus - toms if a declared customs value is obviously not in line with the arm’s length principle. • UFS Wien 2 October 2006, RV/0362-W/02 – this concerns the determination of transfer prices on a flat-rate basis and start-up losses. • BFG 21 October 2020, RV/5100965/2018 – this concerns: (a) management fees and the cost base, which should generally include all expenses in relation to the service pro - vided (excluding pass-through costs and shareholder activities); and (b) the profit mark-up, which is based on the
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